An official revealed that hundreds of millions of dirhams in subsidies would be saved by the United Arab Emirates, if gasoline prices matched international markets. UAE state news agency WAM announced that the UAE's state-run fuel retailers plan to increase gasoline prices by 11% this week.

Gasoline is financed at the pump in the UAE, and Government covers losses that refiners make on the sales at state-mandated prices. Prices are slowly liberalized by the retailers to cut losses made through subsidies gradually, revealed WAM.

The official at a state retailer said, “This will for sure reduce some of our losses which were at least in the hundreds of millions of dirhams in 2009”.

As subsidized prices encouraged consumption from a growing population, demand of fuel across the Gulf has risen quickly.

According to Washington-based consultancy PFC Energy, the demand for oil products will rise 3% to 304,000 barrels per day in 2010 in the UAE. The price of 95-RON gasoline is 1.37 dirhams per litre in the UAE.

Diesel is not subsidized which costs around 2.60 UAE dirhams per litre in the UAE.